Real Estate, Financial Services and Title Insurance Update: Week ending October 1, 2021 | Carlton Fields

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  • FCRA / Arbitration: Forced arbitration by the court of the FCRA claim of the plaintiff in accordance with the arbitration agreement of the parties, with the exception (1) of the clause concerning the legal fees of the parties in force, which is separable and which the court had struck out of the agreement; and (2) the clause placing the place of arbitration in North Carolina, the defendant having agreed to hold the arbitration in Florida or remotely – Lichtman v. Bar Educ., Inc., n ° 8: 21-cv-01370 (MD Fla. September 30, 2021)

  • FDCPA / TILA / RESPA / FCRA / Res Judicata: The plaintiff’s consumer protection claims are barred by the doctrine of res judicata because they were precluded by his 2011 action to obtain a loan modification after the defendant filed a default on the plaintiff’s mortgage – Cherifi v. Select Portfolio Servicing, Inc., n ° 8: 21-cv-00001 (CD Cal. July 30, 2021) (motion for dismissal)

  • FDCPA / TILA / Definition of collection agent and creditor: the plaintiff has not alleged sufficient facts to show that the defendants, one being a law firm acting as a substitute trustee appointed to initiate the process non-judicial foreclosure, and the other a lawyer acting as a substitute trustee. the authorized agent of the company to register the notice of default, were “collection agents” within the meaning of the FDCPA and were not “creditors” within the meaning of TILA – Dare vs. Inku Nam, n ° 3: 19-cv-01765 (SD Cal. 27 Sept. 2021) (motion to dismiss)

  • FDCPA / Prescribed process: The defendant’s filing of a prescribed legal action was a violation of the FDCPA – Stinson v. Houslanger & Assocs., PLLC, n ° 1: 18-cv-11350 (SDNY September 28, 2021)

  • Liability of agent / Duty to defend: the title agent’s E&O carrier had a duty to defend the agent in an underlying legal action brought by the underwriter resulting from a fraudulent transaction in which the agent also issued a lender over limit policy without the underwriter’s approval; While the exclusion of claims arising out of or related to the theft or conversion of funds may apply, the underlying claim also alleged the agent’s lack of authority in issuing a policy of exceeding limit, which triggered the obligation to defend – Ins. of Houston Specialty. Cie c. Fontecilla, n ° 1: 20-cv-20725 (SD Fla. 30 Sept. 2021) (dismissing without prejudice the request for declaratory judgment as to the obligation to indemnify; granting summary judgment as regards the obligation to defend )

  • Settlement and release: The discharge given by the insured in favor of the insurer in settlement of a title claim arising from a neglected easement interest excludes a subsequent claim against the insurer for contribution and / or indemnity brought by the insured as a as assignee of the closing lawyers; discharge applied broadly to all claims “relating in any way whatsoever to the [e]attestation ”, including claims ceded to policyholders by closing lawyers – ALR Oglethorpe, LLC v. Fidelity Nat’l Title Ins. Co., n ° A21A0989 (Ga. App. Ct. September 27, 2021) (confirming the summary judgment)

  • Collective action / Obligation to defend oneself: The professional liability insurer had no obligation to defend the insured closing agent in an alleged class action lawsuit alleging that the closing agent improperly charged the buyer closing costs when the real estate contract required the seller to pays closing costs, where the policy did not cover “return, reduction or dispute over any costs … charged … by” the closing agent, among other exclusions – RLI Ins. Co. v. Baywalk Title Inc., No. 8: 20-cv-01143 (MD Fla. 27 Sep 2021) (rendering summary judgment for the insurer)

  • Coverage / Loss: Title insurer entitled to summary judgment on insured’s claim for damages after insured lost title to certain units for loss of the right to build new single-family residences in the airspace on certain items commons of a condominium comprising the units, where the Rhode Island Supreme Court had earlier determined that the insured could not build homes on the units as improvements; without the possibility of building improvements in the airspace comprising the units, their economic value was zero and the insured suffered no loss – IDC Props., Inc. v. Chicago Title Ins. Co., n ° 1: 09-cv-00632 (DRI Sept. 7, 2021) (rendering summary judgment in review)


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